In August 2018, three friends sat around a table in a Nairobi restaurant brainstorming over business ideas.
Eventually, Eve Karuere, 34, Trevor Otieno, 33 and Edgar Osiemo, 25 decided they wanted to start a digital services platform which would target the youth with a taxi hailing company, financial services, venture capital and entertainment.
In January this year, they inaugurated Caboda, opting to hit the market with the digital cab hailing service. They figured they had to be creative to even get a foothold in the competitive and increasingly saturated segment.
Ms Karuere, the company’s chief executive, says they have realised that the potential in the service industry lies in opening up new markets, and tailoring their service to different demands in different counties.
They have so far spent about Sh6 million in capital for the business, raising the funds from their savings, family contribution and cash injections from board members.
“Our strategy is rural to urban, targeting the last mile transport in rural areas. We have already employed more than 20 client relations officers in Nairobi, Eldoret, Nakuru, Machakos, Mombasa, and Thika,” says Ms Karuere, who studied project management and PR.
“We are planning to go live in Kisii and Kisumu by the end of the quarter, and have already brought on board about 200 drivers, plus several tuk tuks in Mombasa and are looking to finalise how to bring on board boda boda riders.”
On their app, which is available on Google store, they offer four ride classes, categorised by engine size, which also determine the rates per kilometre, per minute and minimum fare.
The lowest class, called Pixie, is open to cars that have an engine size below 1000 cc, charging Sh27 per kilometre, Sh2 per minute and a base fare of Sh150.
On the other end, the firm is offering a service they call Deluxe, which will only be open to luxury vehicles that will charge a premium rate of Sh70 per kilometre, Sh8 per minute and a minimum fare of Sh750.
Standard charges for cars of 1000 to 1500cc are Sh35 per kilometre, Sh3 per minute and a base fare of Sh200, while those above 1500 cc are charging Sh42, Sh4 and Sh250 respectively.
To justify the lower fares, which can easily turn away drivers, the firm is taking up a commission of 12 percent from ride charges, keeping 10 per cent and depositing the other two percent in a savings and investments fund for the drivers.
“The two percent is the drivers’ savings to help build financial inclusion and savings culture. They can then borrow against these savings when they want to reinvest in their business,” said Mr Otieno, who worked for DHL for eight years.
The firm intends to open a venture capital venture using the proceeds from their share of the commission, which they will invest in youth oriented start-ups.
For the entertainment business, they are looking to enter the event ticketing business, while also giving a platform to local artistes to debut their music on their cars.